Chinese Consumers Bargaining for Price of Fashion Products

Abstract

In Chinese market culture, consumers mostly negotiate the price of items before deciding on whether to purchase it or not. However, previous researchers found that bargaining may induce perceived price unfairness which could reduce purchase intention. Several questions are concerned: Why do Chinese consumers bargain? Does price unfairness matter to Chinese consumers? Do they perceive beneficial price so important that they could sacrifice product quality or product value for? Attempting to answer those questions above, this research examines the function of Chinese consumers bargaining behavior affecting consumers purchase intention. Specifically, as the vital factors contribute to purchase intention, perceived price unfairness, perceived special treatment benefit, trust in seller, perceived product quality, and perceived product value are presumed to change as a result of price negotiation. Therefore, this research develops four hypotheses to explore the variance of the relationship among perceived price unfairness, perceived special treatment benefit, trust in seller, perceived product quality, perceived product value, and purchase intention under the condition that the price offer is negotiable, thereby identifying the contribution of bargaining behavior to Chinese consumers purchase decision. In this research, a mock shopping process was adopted online and further conducted in two different models- with or without a bargaining process. Questionnaires related with the subjects responses to research variables were conducted during the mock shopping process. The data collection resulted in a valid sample of 267 Chinese urban female consumers who aged 20-55. The results of this research clearly indicate that bargaining behavior plays a critical role in Chinese consumers purchase process. Chinese consumers showed high intention towards price negotiation during the transaction. To be specific, first, six research variables varied significantly when the price offer was negotiable compared with the ones measured in the case of non-negotiable price. In the case of negotiable price, consumers tended to trust the seller less and perceive the product as low quality. On the other hand, consumers perceived higher special treatment benefit, hedonic value, product value, and purchase intention after the price negotiation. However, no significant variance of consumers perception of price unfairness was found. Second, perceived hedonic value affected perceived product quality and product value positively before and after bargaining. Perceived special treatment benefit had positive effects on perceived product quality only when price was negotiable while positive effects were found on perceived product value before and bargaining. Trust in seller had no significant effects on perceived product quality but positive effect on product value after bargaining. Lastly, the impact of perceived product value on purchase intention was proved consistently with previous researches, that is, consumers who perceived higher product value showed higher purchase intention. Also, perceived product quality had significantly positive impact on purchase intention whether bargaining behavior was acceptable or not in the transaction. This research contributes to provide a general understanding of the function of bargaining behavior on Chinese consumers purchase decision. The impact of price negotiation on purchase decision is concretized into the impact of price unfairness on purchase intention. Further on, this research provides a better understanding of the uniqueness of Chinese consumer behavior for international apparel retailers to be successfully acquainted with the Chinese market.

Keywords: bargaining, price, Chinese consumer behaviour. Student number: 2011-24141